Discover “Is Unreal Engine free? What will be coming up for artists and developers in 2024?”.

Unreal Engine is a complete suite of creation tools, which is best for game development. In addition to video games, UE has been gradually used in many industries. You can use Unreal Engine for visualizing architectural and automotive, creating film and television content, producing broadcast and live events, training and simulation, and other applications.

For such powerful real-time software, how much do you have to pay to use it? In this post, Chip Render will answer “Is Unreal Engine free?” and discuss “What will be coming up for artists and developers in 2024?”.

Yes, Unreal Engine is free.

Unreal Engine is a fantastic deal – it is free to download and comes fully equipped and ready for production right from the start. You get access to every feature and the complete source code.

Under the standard EULA, Unreal Engine is free for learning and for developing internal projects. Plus, it allows you to distribute numerous commercial projects without any charges to Epic Games. This includes custom projects for clients, linear content (such as films and TV shows), and any product that either earns no revenue or falls below the royalty threshold.

So, how much is the royalty threshold for Unreal Engine?

A 5% royalty comes into effect once your title crosses the $1 million mark in earnings. This means you will only pay royalties after your product’s lifetime gross revenue exceeds $1 million, giving you a royalty exemption for the first $1 million.

However, it is important to note that not every product is subject to this royalty. The 5% royalty applies specifically to off-the-shelf products that integrate Unreal Engine code, such as games.

As a result, for creating linear content, custom, and internal projects, and in many cases for game development, Unreal Engine is free.

Though UE is free, there are some options for licenses.

Unreal Engine licensing options

Take a look at the table below.

Three licensing options come with all Unreal Engine features, learning materials, and an entire Quixel Megascans library. However, Enterprise and Custom license provides extra benefits such as premium support, and private training. You can even negotiate terms for lower royalties, no royalties, or a different basis for royalty negotiation.

Therefore, each license is better for a different target audience.

In summary, you should use:

Standard license (FREE)

If you are a creator and publisher who does not need premium support or custom terms. The licensing option is best for:

• Small teams or projects.
• Hobbyists.
• Learning (students and educators).

Enterprise program

If you are a non-games professional looking for premium support, private training, and/or custom licensing terms. The licensing option is best for:

• Enterprise organizations that need specific legal, business, procurement, and/or technical support.
• Interactive off-the-shelf products that are not games and need royalty-free distribution.

Custom license

If you are a game development professional and studio looking for premium support, private training, and/or custom licensing terms. The licensing option is best for:

• Game creators and publishers that need technical support from Epic.
• Game projects with multi-million dollar sales expectations.

To recap, until now, Epic Games has not charged directly for using Unreal Engine. A 5% royalty is only applicable to projects exceeding $1 million in revenue and specifically using the engine’s code. That is, while game developers with high-selling titles pay royalties, those using Unreal Engine for Concept art, Archviz, VFX, and other purposes don’t incur any charges.

But that is going to change next year – in 2024.

Unreal Fest 2023, image by Unreal Engine

At Unreal Fest 2023, Epic Games CEO Tim Sweeney revealed a shift for Unreal Engine from its current free-tool status to a subscription-based model. He said Unreal Engine would adopt a subscription pricing model and become “a licensable piece of software like Maya or Photoshop”. Studios using the engine for non-gaming purposes such as animation, VFX, and visualization will face charges through a “seat-based enterprise software licensing model”.

This is bad news for non-game creatives, sparking concerns within the community, particularly independent filmmakers and non-professionals.

Later, Sweeney clarified that there would be minimum revenue thresholds for commercial projects that need to pay for a subscription. Importantly, students and educators will continue to use Unreal Engine free.

For game developers, there will be no change. The royalty model remains unchanged – a 5 percent royalty applies after revenue exceeds $1 million.

In summary, developers will not be affected. But if you are using Unreal Engine for non-game purposes like Virtual Production, Architecture, VFX, etc., you need to be ready for these upcoming changes.

The changes will be coming up sometime in 2024. Until then, we will have to wait.